Income tax return filing fees considered a tax liability on a divorce agreement?

[amn70]

What is the name of your state (only U.S. law)? NY

On my friends divorce agreement it states that the tax refund that he and his now exwife filed jointly be dispursed with her getting 2/3rds and him the remaining 1/3. As sucky as it is giving her the majority of the refund it was the only way he could get her to sign the agreement. But thats not the issue. There is a clause in the stipulation pertaining to the disbursement of the tax refund that. The quote is below:

"If any additional tax liabilities or interest is accrued by no fault of either party then that sum is to be included in the final disbursement amounts".

The reason for this question is, my friend paid the filing fees for the taxes out of his pocket which amounted to $337. Can the tax return filing fees be considered a tax liability and therefore is he entitled to take the filing fees off the top as reimbursment before dividing up the remainder of the refund? Or will he simply have to eat it?

Thanks in advance,
Adam

 

[mistoffolees]

What is the name of your state (only U.S. law)? NY

On my friends divorce agreement it states that the tax refund that he and his now exwife filed jointly be dispursed with her getting 2/3rds and him the remaining 1/3. As sucky as it is giving her the majority of the refund it was the only way he could get her to sign the agreement. But thats not the issue. There is a clause in the stipulation pertaining to the disbursement of the tax refund that. The quote is below:

"If any additional tax liabilities or interest is accrued by no fault of either party then that sum is to be included in the final disbursement amounts".

The reason for this question is, my friend paid the filing fees for the taxes out of his pocket which amounted to $337. Can the tax return filing fees be considered a tax liability and therefore is he entitled to take the filing fees off the top as reimbursment before dividing up the remainder of the refund? Or will he simply have to eat it?

Thanks in advance,
Adam

Filing fees are not a tax liability (there is no obligation to pay an accountant to file for you), so he can't do that. Furthermore, it's really none of your business and it's really rather disgusting for the guy to be running around scheming with his friends on how he can cheat his ex out of $337 of court-ordered property settlement.

 

[amn70]

I don't understand why you call it scheming. I was asking a simple question. And if you knew the whole story you would think differently. In a nutshell they were married 2 years. He was the sole supporter for her and 4 of her 5 kids, who BTW were from 3 different fathers, thankfully he managed to dodge that bullet and not produce a kid with her. Believe me every friend and family member of his did not want him to marry her but he unfortunately he didn't listen. She was on public assistance before he came into the picture and had been her whole life. She does not work and never has because she claims she has agoraphobia among other things. He gave her everything while they were married and in the divorce he gave her everything including 2/3 of the income tax refund. If it wasn't for his income she wouldn't have gotten jack, even with 3 of her 5 kids used as deductions, 2 now live with their fathers. He could've filed separate and she would have gotten nothing but he was trying to be the nice one. You don't think if she is getting 2/3'rds of the refund that she should be liable for 2/3'rds of what it cost to file the taxes. That clause was there for a reason. Oh and if he had filed the taxes without the accountant she would not have signed the tax return because she did not trust him and would only do it if it was done through the accountant they both had used in the past.

Filing fees are not a tax liability (there is no obligation to pay an accountant to file for you), so he can't do that. Furthermore, it's really none of your business and it's really rather disgusting for the guy to be running around scheming with his friends on how he can cheat his ex out of $337 of court-ordered property settlement.

 

[LdiJ]

I don't understand why you call it scheming. I was asking a simple question. And if you knew the whole story you would think differently. In a nutshell they were married 2 years. He was the sole supporter for her and 4 of her 5 kids, who BTW were from 3 different fathers, thankfully he managed to dodge that bullet and not produce a kid with her. Believe me every friend and family member of his did not want him to marry her but he unfortunately he didn't listen. She was on public assistance before he came into the picture and had been her whole life. She does not work and never has because she claims she has agoraphobia among other things. He gave her everything while they were married and in the divorce he gave her everything including 2/3 of the income tax refund. If it wasn't for his income she wouldn't have gotten jack, even with 3 of her 5 kids used as deductions, 2 now live with their fathers. He could've filed separate and she would have gotten nothing but he was trying to be the nice one. You don't think if she is getting 2/3'rds of the refund that she should be liable for 2/3'rds of what it cost to file the taxes. That clause was there for a reason. Oh and if he had filed the taxes without the accountant she would not have signed the tax return because she did not trust him and would only do it if it was done through the accountant they both had used in the past.

Ok...lets break it down...(I am a tax professional)

He was trying to be the nice one? Complete and total BS.

A joint return with 3 children likely provided a whopping refund. A separate return with just him, and no wife and no children would likely have provided little to no refund at all...and he very well could have owed. Therefore he wasn't being nice to mom, he was looking out for himself. He wasn't wrong for looking out for himself, but that is what he was doing.

He got 1/3 of a refund that had nothing to do with him. It had to do with his ability to claim her and HER children on a joint refund.

As far as the fees are concerned...what he paid was high. Since he had the only income, I have to assume that his income sources resulted in a high fee. How is that his ex's fault? Odds are that his fees would have been similarly high if he had filed separately.

If I had a client making similar complaints...I would run his taxes separately, tallied his bill separately, and then asked him if he really thought that he was being "abused".

 

[mistoffolees]

I don't understand why you call it scheming. I was asking a simple question. And if you knew the whole story you would think differently. In a nutshell they were married 2 years. He was the sole supporter for her and 4 of her 5 kids, who BTW were from 3 different fathers, thankfully he managed to dodge that bullet and not produce a kid with her. Believe me every friend and family member of his did not want him to marry her but he unfortunately he didn't listen. She was on public assistance before he came into the picture and had been her whole life. She does not work and never has because she claims she has agoraphobia among other things. He gave her everything while they were married and in the divorce he gave her everything including 2/3 of the income tax refund. If it wasn't for his income she wouldn't have gotten jack, even with 3 of her 5 kids used as deductions, 2 now live with their fathers. He could've filed separate and she would have gotten nothing but he was trying to be the nice one. You don't think if she is getting 2/3'rds of the refund that she should be liable for 2/3'rds of what it cost to file the taxes. That clause was there for a reason. Oh and if he had filed the taxes without the accountant she would not have signed the tax return because she did not trust him and would only do it if it was done through the accountant they both had used in the past.

None of that is the least bit relevant. No one cares who the children's fathers are or who had the income.

He signed an agreement giving her 2/3 and the court approved it. He wants to cheat her out of part of the money he owes her. You're helping him. End of story.

 

[amn70]

You are correct. By having the children as deductions, that is what the majority of the refund came from. But he had worked it out with the accountant and had he filed separately he would have ended up with almost the exact same amount as the 1/3 he got filing jointly so he would have lost nothing filing separately but she would have lost everything as she has no income at all as she does not work and even with her kids as deductions she would have gotten nothing back according to the accountant. So by him filing jointly, she gained big time and he came out the same. So he did not benefit in any way. So it was his income that produced the big refund. Also originally she tried to get him to use the refund to pay all the property tax on the house that they were living in which was actually owned by her and her two siblings which was inherited from her parents. She said that after the property tax was paid then they would divide the remaining money between them. You think that is fair????? All he wanted was out of the marriage. He hired a lawyer, she never did as she could not afford one. His lawyer many times actually gave her advice on how to handle things on his dime. She even defaulted on the summons and according to his lawyer he could have filed a default judgement on her but he chose to give her more time and instead tried to offer up an amicable agreement which was basically 50/50 everything and she wouldn't agree. It took him giving her 2/3 of the refund and 16 weeks of support before she agreed. Part of the reason he did it was because he still cared about her kids and knew that she needed the money. I you knew the whole story you would understand better.

Ok...lets break it down...(I am a tax professional)

He was trying to be the nice one? Complete and total BS.

A joint return with 3 children likely provided a whopping refund. A separate return with just him, and no wife and no children would likely have provided little to no refund at all...and he very well could have owed. Therefore he wasn't being nice to mom, he was looking out for himself. He wasn't wrong for looking out for himself, but that is what he was doing.

He got 1/3 of a refund that had nothing to do with him. It had to do with his ability to claim her and HER children on a joint refund.

As far as the fees are concerned...what he paid was high. Since he had the only income, I have to assume that his income sources resulted in a high fee. How is that his ex's fault? Odds are that his fees would have been similarly high if he had filed separately.

If I had a client making similar complaints...I would run his taxes separately, tallied his bill separately, and then asked him if he really thought that he was being "abused".

 

[mistoffolees]

You are correct. By having the children as deductions, that is what the majority of the refund came from. But he had worked it out with the accountant and had he filed separately he would have ended up with almost the exact same amount as the 1/3 he got filing jointly so he would have lost nothing filing separately but she would have lost everything as she has no income at all as she does not work and even with her kids as deductions she would have gotten nothing back according to the accountant. So by him filing jointly, she gained big time and he came out the same. So he did not benefit in any way. So it was his income that produced the big refund. Also originally she tried to get him to use the refund to pay all the property tax on the house that they were living in which was actually owned by her and her two siblings which was inherited from her parents. She said that after the property tax was paid then they would divide the remaining money between them. You think that is fair????? All he wanted was out of the marriage. He hired a lawyer, she never did as she could not afford one. His lawyer many times actually gave her advice on how to handle things on his dime. She even defaulted on the summons and according to his lawyer he could have filed a default judgement on her but he chose to give her more time and instead tried to offer up an amicable agreement which was basically 50/50 everything and she wouldn't agree. It took him giving her 2/3 of the refund and 16 weeks of support before she agreed. Part of the reason he did it was because he still cared about her kids and knew that she needed the money. I you knew the whole story you would understand better.

You apparently missed it the first time. Let's try again:

None of that is the least bit relevant. No one cares who the children's fathers are or who had the income.

He signed an agreement giving her 2/3 and the court approved it. He wants to cheat her out of part of the money he owes her. You're helping him. End of story.

 

[amn70]

No I heard you. The reason for this post was simply whether he was entitled to the money. That was why I posed the original question. It wasn't about cheating her. It was to understand whether filing fees were considered a tax liability. We were not sure. His lawyer put the clause there for a reason and we wanted to understand what it meant exactly. If the fees did indeed fall under tax liability and he was stuck with paying the entire thing then she would be cheating him. Somehow you think him wanting to know was simply for malicious intent. He simply wanted to know what was rightfully his. All you had to say in your original response was

"No, unfortunately filing fees are not considered a tax liability so he will have to pay them since they were not specifically mentioned in the agreement.

You are quite a nasty person to immediately attack someone who asks a simple and legitimate question on a help forum. You and his ex would get along great.

You apparently missed it the first time. Let's try again:

None of that is the least bit relevant. No one cares who the children's fathers are or who had the income.

He signed an agreement giving her 2/3 and the court approved it. He wants to cheat her out of part of the money he owes her. You're helping him. End of story.

 

[mistoffolees]

You are quite a nasty person to immediately attack someone who asks a simple and legitimate question on a help forum.

Yeah, I guess I'm a nasty person because I don't condone people who have nothing to do with an issue sticking their nose in to help their friends cheat ex-wives out of money that they're entitled to.

Have it your way.

 

[LdiJ]

You are correct. By having the children as deductions, that is what the majority of the refund came from. But he had worked it out with the accountant and had he filed separately he would have ended up with almost the exact same amount as the 1/3 he got filing jointly so he would have lost nothing filing separately but she would have lost everything as she has no income at all as she does not work and even with her kids as deductions she would have gotten nothing back according to the accountant. So by him filing jointly, she gained big time and he came out the same. So he did not benefit in any way. So it was his income that produced the big refund. Also originally she tried to get him to use the refund to pay all the property tax on the house that they were living in which was actually owned by her and her two siblings which was inherited from her parents. She said that after the property tax was paid then they would divide the remaining money between them. You think that is fair????? All he wanted was out of the marriage. He hired a lawyer, she never did as she could not afford one. His lawyer many times actually gave her advice on how to handle things on his dime. She even defaulted on the summons and according to his lawyer he could have filed a default judgement on her but he chose to give her more time and instead tried to offer up an amicable agreement which was basically 50/50 everything and she wouldn't agree. It took him giving her 2/3 of the refund and 16 weeks of support before she agreed. Part of the reason he did it was because he still cared about her kids and knew that she needed the money. I you knew the whole story you would understand better.

The bolded is not possible.

 

[mistoffolees]

The bolded is not possible.

Which is one of the reasons why third parties are not encouraged to post here.

I can see how it would play out. The two buddies sitting around drinking beer and the one getting a divorce is complaining about how his ex took advantage of him and he shouldn't have given in, etc., etc., etc.

 

[amn70]

Umm, yeah it was. Jointly they got about $10000 between state and federal of which he gets a 1/3 which amounts to about $3000. Had he filed separate he would have ended up with something in the range of $2300 according to the estimate given to him by HR Block. So yes he would have ended up with a bit less filing separate but still a nice amount and she would ended up with nothing. We even talked about it at the time and I asked him if he was willing to take the hit by doing it separate just to get it done since she was dragging out signing the agreement and April 15th was approaching. His basic response was, no, I'll file an extension since either way I am going to end up with over $2000 so since she's got no money I may as well wait it out to do it jointly so she and the kids have some money rather then the goverment. He actually ended up not filing the taxes until late June because of her stubborness.
Oh BTW on the divorce agreement on top of the 1/3-2/3 split of the refund he also gave her and additional $1600 paid out over 16 weeks for grocery money. Oh and just so you know, this never went to court. This was simply a settlement drawn up by his attorney that after countering and bitching and moaning she finally signed. He even had to pay her cab fare to get her to come down to his lawyers office 10 minutes from her house to sign.
BTW his original offer was a 50/50 split of the refund and 6-8 weeks of grocery money and the return of some personal property which he itemized at the time. Her counter offer was that refund would be used to pay off all the property taxes for the year and then splitting the balance 50/50 which would have amounted to maybe 1500 each. She also wanted 1 year of grocery money. And she struck off most of the itemized personal property he requested including items he had prior to the marriage.

The bolded is not possible.

 

[majomom1]

Umm, yeah it was. Jointly they got about $10000 between state and federal of which he gets a 1/3 which amounts to about $3000. Had he filed separate he would have ended up with something in the range of $2300 according to the estimate given to him by HR Block. So yes he would have ended up with a bit less filing separate but still a nice amount and she would ended up with nothing. We even talked about it at the time and I asked him if he was willing to take the hit by doing it separate just to get it done since she was dragging out signing the agreement and April 15th was approaching. His basic response was, no, I'll file an extension since either way I am going to end up with over $2000 so since she's got no money I may as well wait it out to do it jointly so she and the kids have some money rather then the goverment. He actually ended up not filing the taxes until late June because of her stubborness.
Oh BTW on the divorce agreement on top of the 1/3-2/3 split of the refund he also gave her and additional $1600 paid out over 16 weeks for grocery money. Oh and just so you know, this never went to court. This was simply a settlement drawn up by his attorney that after countering and bitching and moaning she finally signed. He even had to pay her cab fare to get her to come down to his lawyers office 10 minutes from her house to sign.
BTW his original offer was a 50/50 split of the refund and 6-8 weeks of grocery money and the return of some personal property which he itemized at the time. Her counter offer was that refund would be used to pay off all the property taxes for the year and then splitting the balance 50/50 which would have amounted to maybe 1500 each. She also wanted 1 year of grocery money. And she struck off most of the itemized personal property he requested including items he had prior to the marriage.

Now you've really thrown some confusion in here. What never went to court?

 

[amn70]

The divorce. It was handled by his lawyer. His wife did not hire a lawyer. His lawyer drew up a fair settlement agreement in January of last year that he and lawyer worked out. A copy was sent to his wife, she made her ridiculous counteroffer, my friend countered again, she countered again and then my friend countered one last time with the final offer that I mentioned which she agreed to. It was April at this point. She procrastinated for close to 2 months until she finally came in and signed it, now June. His lawyer then submitted the papers to the courts and about 2+ months later in August the divorce was finalized.

Just to note part of the agreement was the 16 weeks of grocery money paid on $100 weekly installment. He gave her the first installment the day she came in to sign the papers and continued to give her the checks every week while waiting for the divorce to be finalized. He also went to the accountant the day following her signing to do his half of the tax paperwork with the accountant and sign them. She then came the next day and did her half of tax paperwork and sign them. They were then filed. Oh and part of agreement stated that she had to deliver the agreed upon personal property to him within 30 days of the signed agreement. He wanted to pick the stuff up himself but his wife would not agree to that so he agreed to allow her to send her brother to drop it off at where he was living. 30 days past and she never contacted him to arrange delivery of the stuff. After having his lawyer try to contact her numerous times she finally responded saying she didn't trust that he would hand over her share of the tax refund and was not going to deliver it until she had the tax refund in her hand.

2 months past and he finally received the tax refund checks. Shortly after that she contacted him and asked where her money was. He said she had not honored her end of agreement and delivered his stuff so he was going to hold the checks until she did. He told her he held up his end of agreement all along by immediately starting to pay her the grocery money the day the agreement was signed. She was annoyed and threatened to destroy his stuff but he stood his ground. She never contacted him again after that which was late August. Since then he's held the checks unsigned.

It was decided last month that because the checks would expire comes August and they both would have resubmit for them with the IRS which would complicate matters, he would try one more time to get her to deliver the stuff. We discussed it and decided taking her to small claims court and sue her for the value of his personal property might get her to finally do what she was supposed and deliver the stuff so this past week he took her to court. He only did it to push her to give him his stuff and get her to sign the checks. He didn't actually think even if he won that she would actually give him the money. It was just to push her to follow through. Well the judge got her to agree to deliver his stuff and sign the checks which he brought with him. He deposited the checks the same day and she is supposed to contact him to arrange a mutually acceptable time for her brother to drop the stuff off and he will then hand her brother a check with her share of the refund as it is stated on the divorce agreement. That is why I posed my original question. He wasn't sure if the filing fees were supposed to be counted as part of the tax liability clause and wanted to make sure he wasn't screwing himself out of money that was rightfully his. I hope this clarifies things and maybe you will see why he was indeed the better person in this divorce.

Now you've really thrown some confusion in here. What never went to court?